Former ITV boss Charles Allen is taking control of EMI's music business, home to acts including Coldplay and Robbie Williams, after the surprise departure of chief executive Elio Leoni-Sceti.

Leoni-Sceti will be leaving the troubled company at the end of March after just 18 months with the firm. His departure comes at a critical time for EMI, as the cash-strapped business puts the finishing touches to a new business plan which its private equity owners can present to investors.

Allen, who joined EMI as a non-executive director in January 2009, will become executive chairman of the music company. EMI Music Publishing will continue to be run by chairman and chief executive Roger Faxon. Allen's previous experience at ITV, which he created by merging Granada with Carlton Communications, is likely to increase speculation that EMI is being lined up for a merger with Warner Music.

EMI was bought by Terra Firma, run by City financier Guy Hands, for £4.2bn in 2007 but has run into severe problems, with key acts defecting and profits crashing. The company has suffered turbulent relations with some of its top acts, most recently ending up in court with Pink Floyd and plunged £1.75bn into the red last year. Crucially, unless Terra Firma can find more than £100m from investors to satisfy the terms of its loan from Citigroup, the bank which advised the private equity firm on the buyout and provided the lion's share of the funding, EMI will end up in the hands of its banks.

Leoni-Sceti, a former executive with consumer products group Reckitt Benckiser, was asked to come up with a plan that would persuade investors to get involved. That business plan is due to be presented and new money raised by the end of June. But Leoni-Sceti said today: "My job here is now done and it is time for me to move on."

Allen said he had been closely involved in the creation of the company's new business plan. "Elio and I have worked together for the last 14 months and he has decided that he has done what he came to do," he said.

He said that new business plan would be "very much an extension of things we have been doing", adding: "If you look at what Terra Firma did, they came in and rationalised the cost base and we have continued to tighten the business. But more importantly what you have now got is a real focus on how do we drive new music, a focus on hits. These things do not happen overnight, you have to nurture new talent but the early signs are pretty positive."

"The problem, the issue, is getting our message through. This is a good company with good people, we have got more to do but we are on track to deliver. We have a challenged cost structure."

But the storm clouds keep gathering over the business. Terra Firma is currently locked in a bitter legal fight with Citigroup, claiming the bank tricked it into offering too much for EMI by failing to inform it that other potential buyers had pulled out. A US judge will rule by the end of the month whether the case will be heard in the US or UK.

Allen said: "Would it be better if that wasn't there? Yes, but the team have got their heads down and just got on with it."

Hands made headlines when he bought the business, as a result of his at times heavy-handed dealings with artists. Since then the new management at EMI has been building bridges. Asked whether he would be involved in dealing with EMI's artists, Allen said he had already been meeting them. "I have spent a lot of time with the talent and the management," he said. "It's like ITV. Would you deal with Simon Cowell or Ant and Dec as chief executive? Yes you would. Here you would be dealing with Robbie Williams or Lily Allen or whoever."

One of the key acts that Allen will have to charm is Coldplay. The band's next album is rumoured to be the last under the existing deal with EMI, although last month the band's frontman, Chris Martin, said the band was "signed for a lot".

"I think there is a good relationship with Coldplay," Allen added. "They are really talented and really focused and great to work with. The team they deal with on a day-to-day basis is the team that's there delivering for them."